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TraderDog

Bank accounts and Credit Card Debt

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Theoretical question...  Lets say you have charged off accounts with a bank (Citi JPM BOA.....).  At the same time you have checking accounts with the same bank.  Is it possible that some large deposits in the checking account could trigger collection activity on the credit card debt?  In other words does anyone know if banks, utilizing some algorithm or process, have triggering events around such things?  I know that when you apply for a mortgage or a loan it seems to trigger some activity with collections - possibly a subscription or something that the CRAs offer?  Look they need credit...lets get em kind of thing.  It made me wonder if banks review or watch bank accounts of customers that have outstanding debts and if they see a large deposit they spin things up.  Thoughts?  TIA

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Cross-collateralization tends to be more of a credit union thing, but there is always a possibility that your accounts with a bank could be flagged for SAR-and/or CTR- types of deposits.  If you are not structuring and are not in SAR or CTR category, then you are not talking about large deposits...

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18 hours ago, TraderDog said:

Theoretical question...  Lets say you have charged off accounts with a bank (Citi JPM BOA.....).  At the same time you have checking accounts with the same bank.  Is it possible that some large deposits in the checking account could trigger collection activity on the credit card debt?  In other words does anyone know if banks, utilizing some algorithm or process, have triggering events around such things?  I know that when you apply for a mortgage or a loan it seems to trigger some activity with collections - possibly a subscription or something that the CRAs offer?  Look they need credit...lets get em kind of thing.  It made me wonder if banks review or watch bank accounts of customers that have outstanding debts and if they see a large deposit they spin things up.  Thoughts?  TIA

 

Interesting that you brought up this question.

 

That the bank you owe knows you have deposits with them is the least of your worries.  The simple fact is that every creditor you owe knows which bank you have money in and precisely how much.

 

For the first time I obtained a copy of my EWS disclosure and went through it.  I have deposit accounts at several banks and each and every one reports to EWS my monthly statement balance.  The Richardheads even report every single ACH and wire transaction I have had.

 

 

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14 minutes ago, TraderDog said:

EWS?

 

Early Warning Systems (or is it Services?).  It's a specialty credit reporting agency.

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On 9/26/2019 at 6:45 AM, PotO said:

 

Interesting that you brought up this question.

 

That the bank you owe knows you have deposits with them is the least of your worries.  The simple fact is that every creditor you owe knows which bank you have money in and precisely how much.

 

For the first time I obtained a copy of my EWS disclosure and went through it.  I have deposit accounts at several banks and each and every one reports to EWS my monthly statement balance.  The Richardheads even report every single ACH and wire transaction I have had.

 

 

It's disturbing how much info is collected on people these days (and it's all for sale). 

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On 9/26/2019 at 6:45 AM, PotO said:

{R}eport every single ACH and wire transaction I have had.

Which includes your direct deposits, and in turn shows who the direct deposits originate from (ie your employer) ?

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7 hours ago, IndyPoolPlayer said:

Which includes your direct deposits, and in turn shows who the direct deposits originate from (ie your employer) ?


It only shows checking account transactions.  My direct deposit goes into savings.  Perhaps fortunately. Looks like my wife was finally right on something. :)

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7 hours ago, Second Chances said:

It's disturbing how much info is collected on people these days (and it's all for sale). 


Extremely disturbing.

 

I had recently ordered copies of my files from every known data source and was just going through the stacks of paper.  Frankly, I assumed LexisNexus would be the worst, but I was wrong.  Dead wrong.

 

LexisNexus had nothing but about 40 addresses from over the past 40-odd years, most spelled incorrectly and classified incorrectly as non-military.  
 

But EWS takes the cake.  They list almost every checking account and for most of them they list all bank wires, checks, ACH transfers and monthly balances.  Not sure about others, but to me that is totally FUBAR ... totally unacceptable.  It ought to be illegal.  

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18 minutes ago, PotO said:


It only shows checking account transactions.  My direct deposit goes into savings.  Perhaps fortunately. Looks like my wife was finally right on something. :)

:offtopic:you have more legal protections having all deposits into checking.

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9 minutes ago, hegemony said:

:offtopic:you have more legal protections having all deposits into checking.

How is that?

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8 minutes ago, PotO said:

How is that?

Reg CC IIRC funds into savings can take up to 30 days to be credited (perhaps DD is not subject to this as DD has its own fed regs)

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9 minutes ago, hegemony said:

Reg CC IIRC funds into savings can take up to 30 days to be credited (perhaps DD is not subject to this as DD has its own fed regs)

Good to know!

 

DD is available immediately.  In fact, I get it two days before payday every time and 100% is available for use.  
 

Only get my wife's one day early and not a penny is available for my use.  The biatch is tighter than a gnat's arse is a windstorm.  Her philosophy is, "What's yours is mine & what's mine is mine, too."  And ya wonder why I'm gonna ride off into the sunset with Kat.  :)

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On 9/27/2019 at 9:04 PM, PotO said:

 And ya wonder why I'm gonna ride off into the sunset with Kat.  :)

 

Did you bury her after dusk?  I'm missin' Kat somethin' bad ...

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25 minutes ago, hdporter said:

 

Did you bury her after dusk?  I'm missin' Kat somethin' bad ...

 

No, Kat was alive and well last I saw her.  Not sure where she went, but I miss her.  If she's not back soon I will need to deploy to AK ISO my lovely feline friend.

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8 hours ago, tmcgill said:


Don't rely much on that article.  Much of it is wrong.  The author is stupid.

 

Federal law does not bar offset for credit card debt.  The law in place only applies to banks that are not state chartered and even then offset for credit card debt is allowed, provided that the bank actually provides you a copy of their T&Cs which in one single paragraph specifically state they will exercise offset for credit card debt AND you specifically and conspicuously apply your signature to that paragraph.  
 

Again, that does not apply to state chartered banks, regional banks and credit unions.  It also does not apply to credit unions.  

 

State law, if more restrictive, takes precedence.  
 

Regarding credit unions, we've seen on CB hundreds of cases where the CU zaps your accounts for delinquent credit card debt.  
 

I doubt they can offset exempt funds.  USAA had the bejesus sued out of them for offsetting exempt military pay direct deposited into accounts by two people in my unit.  I don't see how Social Security would be any different.  

 

 

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On 9/27/2019 at 8:54 PM, PotO said:


Extremely disturbing.

 

I had recently ordered copies of my files from every known data source and was just going through the stacks of paper.  Frankly, I assumed LexisNexus would be the worst, but I was wrong.  Dead wrong.

 

LexisNexus had nothing but about 40 addresses from over the past 40-odd years, most spelled incorrectly and classified incorrectly as non-military.  
 

But EWS takes the cake.  They list almost every checking account and for most of them they list all bank wires, checks, ACH transfers and monthly balances.  Not sure about others, but to me that is totally FUBAR ... totally unacceptable.  It ought to be illegal.  

Very disturbing.  Is there a list of banks that are known to report information in this detail to EWS?  Or a list of banks/credit unions that do not?

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28 minutes ago, Burdell said:

Very disturbing.  Is there a list of banks that are known to report information in this detail to EWS?  Or a list of banks/credit unions that do not?

 

I'm not sure.  

 

Not every bank where I have an account reported, but I was surprised to see that USAA did.  Not so surprised to see Chase, B of A and US Skank.  

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I posted from the Bankrate blog because it said the same thing as the feds about credit card debt.

 

From the US Office of the Comptroller:

https://www.helpwithmybank.gov/get-answers/bank-accounts/right-of-offset/faq-bank-accounts-right-of-offset-01.html

 

The Federal Reserve Board’s Regulation Z, Section 226.12(d), bars financial institutions from applying the right to offset to credit card debts.

 

 

 

 

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On 9/27/2019 at 7:43 PM, PotO said:


It only shows checking account transactions.  My direct deposit goes into savings.  Perhaps fortunately. Looks like my wife was finally right on something. :)

What I found interesting when I got my EWS report was that, while it showed all the ACH transactions, it did not reflect inbound versus outbound.  I am mildly curious whether the subscribers see how the transactional breakdown hits the account...

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3 hours ago, tmcgill said:

I posted from the Bankrate blog because it said the same thing as the feds about credit card debt.

 

From the US Office of the Comptroller:

https://www.helpwithmybank.gov/get-answers/bank-accounts/right-of-offset/faq-bank-accounts-right-of-offset-01.html

 

The Federal Reserve Board’s Regulation Z, Section 226.12(d), bars financial institutions from applying the right to offset to credit card debts.

 

 

 

 

 

Jethro, reading really is fundamental:

 

(2) Rights of the card issuer. This paragraph (d) does not alter or affect the right of a card issuer acting under state or Federal law to do any of the following with regard to funds of a cardholder held on deposit with the card issuer if the same procedure is constitutionally available to creditors generally: Obtain or enforce a consensual security interest in the funds; attach or otherwise levy upon the funds; or obtain or enforce a court order relating to the funds.

 

The CFPB then dumbs it down for you further:

 

1. Security interest - limitations. In order to qualify for the exception stated in § 1026.12(d)(2), a security interest must be affirmatively agreed to by the consumer and must be disclosed in the issuer's account-opening disclosures under § 1026.6. The security interest must not be the functional equivalent of a right of offset; as a result, routinely including in agreements contract language indicating that consumers are giving a security interest in any deposit accounts maintained with the issuer does not result in a security interest that falls within the exception in § 1026.12(d)(2). For a security interest to qualify for the exception under § 1026.12(d)(2) the following conditions must be met:

i. The consumer must be aware that granting a security interest is a condition for the credit card account (or for more favorable account terms) and must specifically intend to grant a security interest in a deposit account. 

ii. With respect to a credit card account other than a covered separate credit feature accessible by a hybrid prepaid-credit card as defined in § 1026.61, indicia of the consumer’s awareness and intent to grant a security interest in a deposit account include at least one of the following (or a substantially similar procedure that evidences the consumer’s awareness and intent):

A. Separate signature or initials on the agreement indicating that a security interest is being given.

B. Placement of the security agreement on a separate page, or otherwise separating the security interest provisions from other contract and disclosure provisions.

C. Reference to a specific amount of deposited funds or to a specific deposit account number.

iii. With respect to a covered separate credit feature accessible by a hybrid prepaid-credit card as defined in § 1026.61, in order for a consumer to show awareness and intent to grant a security interest in a deposit account, including a prepaid account, all of the following conditions must be met:

A. In addition to being disclosed in the issuer’s account-opening disclosures under § 1026.6, the security agreement must be provided to the consumer in a document separate from the deposit account agreement and the credit card account agreement;

B. The separate document setting forth the security agreement must be signed by the consumer;

C. The separate document setting forth the security agreement must refer to the deposit account number and to a specific amount of funds in the deposit account in which the card issuer is taking a security interest and these two elements of the document must be separately signed or initialed by the consumer;

D. The separate document setting forth the security agreement must specifically enumerate the conditions under which the card issuer will enforce the security interest and each of those conditions must be separately signed or initialed by the consumer.

iv. The security interest must be obtainable and enforceable by creditors generally. If other creditors could not obtain a security interest in the consumer's deposit accounts to the same extent as the card issuer, the security interest is prohibited by § 1026.12(d)(2).

2. Security interest - after-acquired property. As used in § 1026.12(d)(2), the term “security interest” does not exclude (as it does for other Regulation Z purposes) interests in after-acquired property. Thus, a consensual security interest in deposit-account funds, including funds deposited after the granting of the security interest would constitute a permissible exception to the prohibition on offsets.

3. Court order. If the card issuer obtains a judgment against the cardholder, and if state and other applicable law and the terms of the judgment do not so prohibit, the card issuer may offset the indebtedness against the cardholder's deposit account.

 

Resit third grade.

 

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I just love it on CB when smart A's break it down and make things simple for everyone. Yeah, we did study finance in that class.  Lol

Edited by tmcgill

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